Why Are Prices For Last Minute Prices At The Airport Terminal So High?

[Raul_SJ]

I do understand the airlines wants to encourage passengers to book in advance.

But if the plane is about to takeoff with a lot of empty seats, why doesn't the airline try to make some money and sell you the seat at the terminal for an attractive price instead of charging some ridiculous price that is three or four times higher than the average price?

 

[VoodooBoot]

I do understand the airlines wants to encourage passengers to book in advance.

But if the plane is about to takeoff with a lot of empty seats, why doesn't the airline try to make some money and sell you the seat at the terminal for an attractive price instead of charging some ridiculous price that is three or four times higher than the average price?

Two completely different scenarios.

If the airline knows in advance (say 2 weeks) that their plane is going to be empty, they're going to drop the price. The lower price may attract people to, say, make a vacation. These people wouldn't probably pay retail and would stay home if the price didn't drop.

The scenario you're describing is completely different. Someone is already at the airport and he or she has planned their trip (vacation, emergency, etc.), but they don't have a ticket. They're far more willing to pay double or triple the price in that situation, because their only choice is to cancel their trip.

 

[KineticChain]

I don't know why the prices for last minute prices are priced so pricey

 

[Bartelby]

They used to sell airline tickets like that on what they called 'standby'. So you came to the airport, asked for a ticket and waited until a seat became available on a fight and got a big discount as a result.

I think computerised sales brought forward early cheap tickets which put money into airline coffers long before the flight itself so those wouldn't sell as well if standby fares were still available.

 

[Raul_SJ]

The scenario you're describing is completely different. Someone is already at the airport and he or she has planned their trip (vacation, emergency, etc.), but they don't have a ticket. They're far more willing to pay double or triple the price in that situation, because their only choice is to cancel their trip.

I see your point... I was thinking more along the scenario where someone is willing to travel on a whim (non-emergency) and is willing to show up to travel on flights with available seats.

But perhaps the urgent scenario is more common and hence the high price.

I guess the airlines have tried both pricing strategies and have figured out that the revenue is maximized by charging much higher for the last-minute passengers rather than discounting.

 

[VoodooBoot]

I see your point... I was thinking more along the scenario where someone is willing to travel on a whim (non-emergency) and is willing to show up to travel on flights with available seats.

In Europe people often do that, I've done it myself while a student. A couple of months ago I talked to a group of Dutch in a bar. They said that they'd bought super cheap tickets a couple of days ago and had come just for the weekend (cheap booze!). They said they did they quite often.

But I doubt it than anyone would pack their bags and go the airport hoping to get some cheap flights.

But perhaps the urgent scenario is more common and hence the high price.

I guess the airlines have tried both pricing strategies and have figured out that the revenue is maximized by charging much higher for the last-minute passengers rather than discounting.

They sure have figured it out.

 

[Overdrive]

It's a simple marketing strategy.

 

[El Diablo]

^^ well, no, it's not a marketing strategy, it's part of a business plan. Marketing is defined as the activities that make the public aware of your product and make your product attractive to the public. Very high prices for last minute customers is neither of those. It's simply part of a business plan to maximize revenue

 

[Overdrive]

^^ well, no, it's not a marketing strategy, it's part of a business plan. Marketing is defined as the activities that make the public aware of your product and make your product attractive to the public. Very high prices for last minute customers is neither of those. It's simply part of a business plan to maximize revenue

It's still under the umbrella of marketing.

 

[struggle]

seems that DEMAND (in the supply/demand scenario) is pretty high at this point, so the price is set accordingly.

 

[West Coast Ace]

With @El Diablo on this one. Yield management. Famous line from the movie 'Wall St.': "why sell a guy a ticket for $350 he's willing to pay $700 for." Airlines know what they're doing.

 

[Raul_SJ]

^^ well, no, it's not a marketing strategy, it's part of a business plan. Marketing is defined as the activities that make the public aware of your product and make your product attractive to the public. Very high prices for last minute customers is neither of those. It's simply part of a business plan to maximize revenue

Price is part of the "Marketing Mix"...

The three P's of Marketing:
Product
Price
Promotion

 

[West Coast Ace]

^^^^

@Raul, don't forget Loyalty. Your frequent flyers who buy tickets ahead of time (on their own dime) wouldn't be too happy to hear people sitting next to them bragging about their last minute deal.

With the consolidation in the industry post 9/11, there aren't a ton of seats going out empty on major routes. And the airlines are dumping unprofitable routes. I did my share of mileage runs - those were the days.

 

[Chotobaka]

Too bad Courier tickets aren't around anymore. If you could live with short notice and only a carry on, these were incredible deals.

 

[El Diablo]

Raul
Price is of course part of marketing; my point was that MUCH HIGHER prices are not a marketing strategy in this case, though could be in some rare examples where a manufacturer wants to create an air of exclusivity. That's not the case with air fares.

 

[BeGreat]

I don't know why the prices for last minute prices are priced so pricey

I see what you priced there.

 

[Chico]

I do understand the airlines wants to encourage passengers to book in advance.

But if the plane is about to takeoff with a lot of empty seats, why doesn't the airline try to make some money and sell you the seat at the terminal for an attractive price instead of charging some ridiculous price that is three or four times higher than the average price?

Simply, because they are trying to rip you off.